General Motors, the parent of Hughes Electronics, accepted Raytheon's bid, worth $9.5bn (pounds 5.7bn), at a board meeting in New York. Raytheon's victory will propel it into the number three position among US defence contractors after Boeing and Lockheed Martin.
The announcement meant defeat for Northrop Grumman, the maker of the B-2 bomber, which had also joined the bidding contest. In the long term, the company may be forced into alliances of its own to survive, analysts say.
The takeover of the Hughes defence businesses will act as another spur to the restructuring of the European defence industry, which is well behind the pace set by leading contractors in the US. Last autumn Dick Evans, chief executive of British Aerospace, predicted the European industry would ultimately consolidate into a small core of big players, but said the process had become bogged down in national politics.
BAe's vision is of a single European holding company encompassing everything from missile technology and military jets to civil aircraft. Some progress has been made with the merger of BAe's missiles business with Matra of France and the ongoing merger of Dassault with Aerospatiale.
Raytheon is believed to have bolstered its position in the race for Hughes by its purchase earlier this month of the defence electronics component of Texas Instruments for about $3bn. The move created a better match between Raytheon and the Hughes businesses.
Raytheon hopes to close the deal within six months. The company is offering $5.1bn in stock and will assume $4.4bn in Hughes debt. The transaction will be submitted to approval votes among GM and Raytheon shareholders.
Raytheon said the combined company would have annual revenues of close to $21bn and a workforce of 127,000.
Any unfair competition issues that may be raised by US regulators would almost certainly focus on the missiles sector; Raytheon and Hughes Electronics have large missile businesses. As well as producing small aircraft and other defence products, Raytheon also has an important engineering consultancy division.
The Hughes sale will allow General Motors to concentrate on its core business of car-making. The remaining parts of Hughes, which General Motors may or may not choose to hold on to, will be focused on satellite communications and broadcasting.